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The effects of a tightening in the suitable employment policy in the Netherlands

This study estimates the effects of a tightening in the Dutch suitable employment policy implemented on the 1st of July 2015. Unemployed workers are obliged to accept all job offers after being unemployed for at least six months (previously twelve months). The tightening theoretically induces unemployed workers to redeploy earlier and, therefore, may seem an effective way to reduce the unemployment benefit expenditures. Using administrative data from the Dutch unemployment insurance agency (UWV), a regression discontinuity (RD) design and a triple difference-in-differences (DiD) approach are exploited to assess the effectiveness of the policy on the unemployment duration and job quality in terms of earnings and employment stability. The results indicate negative effects on the unemployment duration and employment stability but find no effects for the level of earnings. Consequently, governments face a trade-off between incentivising early redeployment and limiting relapse into unemployment.